Microsoft is trading near record levels after years of strong gains, at about US$555.8 a share, and has returned 74.2% over the past five years. A discounted cash flow (DCF) model based on trailing twelve-month free cash flow of about $97.3b estimates an intrinsic value meaningfully above the current price of $555.80, with projected free cash flow described as growing. The article notes heavy AI infrastructure spending, including a recent $25b bond issue, which raises funding needs but could also lift future cash generation. The stock trades at a 28.9x P/E. The article says the gap between the DCF estimate and the share price is a starting point for further analysis rather than a conclusion.
Summary written by Upside AI from the original article. Read the source for full details.
Read the original on Yahoo Finance ↗
Keywords
MSFTvaluationAI investmentbonds
Open a keyword to see other news on the same topic.
Related tickers and likely impact
MSFT
▲ Likely positiveMicrosoft
Relevance: low
| Market | US stocks |
|---|---|
| Sector | Information Technology |
| Industry | Systems Software |
| Market cap | $3.9T |
| Close on 11/04/2026 | 556.03 |
| Change that session | +6.73% |
Impact is scored by AI from the headline and may be wrong. It is not investment advice.
Related news
- Microsoft Stocks Jump 3.5% as $25 Billion Debt Sale Is Due to Close
Microsoft (NASDAQ:MSFT) rose 3.51% to $539.30 in premarket trading on November 4, as its $25 billion bond sale neared settlement. The offering, priced October 29, includes $23 billion of fixed-rate notes with coupons of 4.85% to 6.35% and maturities up to 2066, plus $2 billion of floating-rate debt. Proceeds can fund capital spending, debt repayment and other corporate needs, so the whole amount cannot be treated as dedicated to cloud infrastructure. The article estimates the fixed-rate tranches carry about $1.284 billion in annual coupons, roughly 0.70% of quarterly operating income ($45.9 billion) multiplied by four, before floating-rate interest. It argues the harder question is whether new capacity generates enough cash to cover costs and earn an adequate return.
- Paul Krugman says billions in AI borrowing will hit a 'Wile E. Coyote moment' as lenders get cold feet
Nobel laureate economist Paul Krugman argues that the borrowing funding AI spending will soon run dry as lenders get 'cold feet.' Alphabet, Amazon, Meta and Microsoft borrowed $214 billion between them, up from $83 billion the previous year, according to The Economist. Citing Morgan Stanley research via the Financial Times, weekly trading in credit default swaps on bonds from AI giants averaged more than $9 billion in September, versus less than $2 billion per week in July. Krugman says lenders to AI companies are having a collective 'Wile E. Coyote moment,' the point where they look down after running off a cliff and begin to fall.
- Why Microsoft Was Rewarded for Spending Less on AI
Wall Street rewards hyperscalers that fund AI expansion with their own cash and punishes those that borrow or sell stock to pay for it. Microsoft (NASDAQ:MSFT) trimmed its capex: fiscal first-quarter spending was $45.2 billion, partly because some third-party capacity deliveries slipped, with full calendar-year spending guided to about $170 billion. Its shares fell 4.7% over the past week to $507.12, less than Alphabet (down 12.1%) and Oracle (down 6.3%). Microsoft's operating cash flow rose 29% to $58 billion and free cash flow reached $18.6 billion, with Azure revenue up 48%. Alphabet posted negative free cash flow of $9.07 billion and raised $28.7 billion in notes and $12.4 billion through stock sales, while Oracle reported negative free cash flow of $5.40 billion and filed to sell new stock and bonds.
- Microsoft's Bond Issuance is Textbook Structural Strategy So I Buy, Not Panic
The author bought more Microsoft shares after the latest earnings report and again when reports emerged that the company plans its first major US investment-grade bond sale in years. He argues that $677 billion in contracted revenue not yet recognized, up 73%, shows demand exceeding supply, making borrowing to add capacity sensible. According to the article, the balance sheet remains strong, with long-term debt of $31.09 billion against $470.51 billion of shareholders' equity, and quarterly revenue rose 18.8% to $92.28 billion. The main risk cited is capital expenditure of about $170 billion for the calendar year; if AI demand cools before new capacity earns revenue, Microsoft could end up overbuilding with borrowed money.
- AI Bond Funding Might Change The Case For Investing In Microsoft (MSFT)
Microsoft has expanded AI partnerships and deployments, including a cloud and data overhaul on Azure for Estée Lauder and broad Copilot rollouts. It has also completed several bond tranches, part of a planned US$25b investment-grade offering to fund general corporate needs, including AI infrastructure. Management plans roughly US$175b to US$190b of 2026 capex on chips and data centers. The analysts' base case projects revenue growth of about 20.2% a year over the next three years and earnings rising from US$142.6b today to US$221.5b by 2029, with a consensus price target of US$628.81 against a share price of US$521.97. A bearish view sees revenue of about US$511.4b and earnings of US$206.3b by 2029.
- Microsoft (MSFT) Lands $25 Billion Bond Deal As AI Push Deepens
Microsoft completed a record US$25 billion multi-tranche bond sale, its first major issuance in nearly a decade. The company said the proceeds will support long-term funding for AI infrastructure and its cloud platforms, alongside an expanded AI collaboration with The Estée Lauder Companies. The fixed and floating rate senior unsecured notes mature in 2 to 40 years, raising total debt while staggering repayments, and the AAA rating and strong earnings support interest costs. The article explains that borrowing despite strong cash flow helps lock in long-term funding for AI data centers and spreads the cost of planned US$170b to US$190b capex for calendar 2026. It names free cash flow and Microsoft Cloud margins over the next four quarters, along with net debt to free cash flow, as indicators for judging the AI financing.
Related markets
Latest news
- Why Did AAPL, MSFT, AMC Stocks Surge To 52-Week Highs?
Apple (AAPL), Microsoft (MSFT) and AMC Entertainment (AMC) hit 52-week highs on Wednesday, rising 5%, 6% and 7% respectively, as a Democratic midterm election sweep and earnings momentum lifted sentiment. Apple reached an all-time high of $354.5, with its market capitalization passing $5 trillion, as investors anticipated stronger device demand; Bernstein raised its price target to $380 from $370. Microsoft hit a record $559.15 after fiscal first-quarter 2027 results beat expectations, with revenue up 19% to $92.28 billion and Azure growing 48% to $33.17 billion. AMC rose to $3.56 after record results for the second straight quarter, with Q3 revenue up 31.6% to $1.71 billion and adjusted EBITDA up 183.7% to $347.5 million. So far this year, the three stocks have gained between 14% and 125%.
- How much interest does a 100 million VND deposit earn at Agribank on November 5?
A 100 million VND deposit at Agribank on November 5 could earn from a few hundred thousand VND to over 13 million VND, depending on term and channel. Counter deposits pay 2.6%/year for 1–2 months and up to 5.5%/year for 24 months, yielding about 5.4 million VND over 12 months and about 11 million VND over 24 months. Online deposits pay higher rates at many terms, up to 4.75%/year for under 6 months and 6.8%/year for 9 months or more. Estimated online interest is about 3.3 million VND for 6 months, 6.8 million VND for 12 months and 13.6 million VND for 24 months, about 2.6 million VND more than the counter for 24 months. These figures assume simple interest paid at maturity and may change, so customers should check actual rates when opening an account.
- Deputy Governor Pham Quang Dung receives IMF experts on risk-based AML/CFT supervision
On November 4, 2026, Deputy Governor Pham Quang Dung met IMF experts working on a technical assistance project to strengthen risk-based AML/CFT supervision, launched in late 2022. Discussions covered completing the risk-scoring toolkit, inspection plans, the legal framework and progress on actions under the FATF action plan. The Deputy Governor said the toolkit had been used across 3 assessment cycles in the past 3 years, and a circular signed on October 30, 2026 takes effect on December 1, 2026, alongside the amended AML law. IMF representative Carolina Claver praised the SBV’s efforts and expressed hope that it will keep updating the toolkit after the project ends.
- An Phat Holdings CEO sells entire stake
Mr. Pham Do Huy Cuong, a board member and CEO of APH, sold all 1.125 million shares (0.46% of its capital) through a negotiated transaction on November 2, 2026, and no longer holds any APH shares. He has been CEO since January 2023 and served as CFO from 2018. For Q3/2026, consolidated after-tax profit reached 136.6 billion VND, up nearly 20 billion VND year on year, while net revenue rose 19% to 2,826 billion VND. For the first nine months, net revenue fell 12% to 7,508 billion VND, but profit from associates rose from 38 billion to 134 billion VND, lifting after-tax profit 42% to 483 billion VND.
- Russia, China may be more aggressive if they feel Trump is on "his way out": Brookings
Brookings Institution senior fellow Robert Kagan told CNBC that Russia and China could act more aggressively within two years if they judge President Donald Trump politically weakened and “on his way out” after Democrats won both chambers of Congress. He argued the war with Iran exposed US military limits, as missile-defense interceptors were heavily depleted and three aircraft carriers were sent to the Middle East, reducing US naval presence in Asia. Kagan said Trump’s main interest now is economic deals with China, which could push Beijing to be even more aggressive. Trump approved an $11 billion arms package for Taiwan in December but held back a second package of about $14 billion, calling it a “bargaining chip” in talks with China. Meanwhile, the three countries are discussing a possible Trump–Xi–Putin summit at APEC in Shenzhen later this month, though no agenda has been announced.
- FDI into Ho Chi Minh City rises more than fourfold
Ho Chi Minh City attracted 19.1 billion USD in FDI in the first 10 months, 4.2 times the same period in 2025, according to the city’s statistics office, accounting for over 30% of the national registered total of 54.85 billion USD. Of this, nearly 9.8 billion USD came from 1,726 newly licensed projects, 5.7 billion USD from capital increases and over 3.6 billion USD from capital contributions and share purchases. Major projects include the Can Gio International Transshipment Port (over 4.9 billion USD) and the AI Factory data center (2.1 billion USD), which Vice Chairman Nguyen Loc Ha described as a positive sign of investor confidence. The industrial production index rose 11%, exports grew 10.9% and retail sales rose 14.7%, but CPI averaged 4.78% higher over 10 months, adding pressure on purchasing power. From the start of the year to October 20, newly registered enterprises fell 6% to over 44,700, and registered capital fell 58.1% to 365,185 billion VND.
Get the briefing on Telegram or Zalo
Join the Upside Telegram channel or Zalo group for the Vietnam stocks and gold briefing at 8:00 and 19:00 (Vietnam time) on trading days, plus a weekly wrap on Saturday morning.